Mar 24, 2015

Death of the Branch Manager

Abigail and Dolley readers for a nice change of pace, let's look at the current mindset of corporate America.
 Keep in mind, big business by and large is now completely dominated by leftists.  They are running companies the way they run government - from the top down.

(Disclaimer:  This blog is a broad stroke observation of the last 15 years in corporate america, it is not necessarily my personal experience nor is it an indictment of a specific company, past or present.  It is inspired by observations, news reports, friends and colleagues who all share their tales of woe.  It is not industry specific as these stories come from banking to retail to manufacturing to logistics to education.)

They have embraced the "economy of scale buys efficiency and cost saving model" with a reckless abandon.  Ignoring lost revenues, lost business, low customer satisfaction, and low employee morale they venture forth adding more and more layers of bureaucracy and processes.  Ivory Tower executives double down on failure and assert it is the people, the customers, and the soft markets fault - never stopping to consider that their MBA inspired plan is wrong.

It started with the destruction of the Branch Manager.  At one point, being a Branch Manager was the best job around.  They were captains of their ships, miniature CEO's, empowered to make money for the company, take care of the customer, and attract the best talent.  Capitalism at it's finest.  Market pressure would drive quality and the best and the brightest would make themselves and their company a handsome profit.

Influence by socialist university professors and executive MBA's, the Branch Manager's pivotal position has been largely eliminated or reduced in power to be completely ineffective.  It is destroying American Capitalism.

It started with the Budget... in year's past, a Branch Manager would look at the pipeline, anticipate growth, adjust for lost business, plan for projects, and adjust projects or losses.  They'd submit a budget with realistic expectations.  This was the first casualty - flat growth rates across the board were mandated from on high.  The budget wasn't based on anything other than last year's figures and a wish.

Then Accounting stepped in ... Branches stopped paying their vendors directly.  So instead of a local relationship, bills are now paid at "corporate".  Of course, at one point, the Branch Manager had an accounting person that paid all the bills, collected on the AR, and reported payroll.  This person also negotiated with the copier company, found deals at three stores for office supplies, organized the company Christmas parties (that are a thing of the past), and generally watched every penny like a hawk.  The office manager was the first casualty - six people were hired at corporate to take these separate tasks.  The desk level workers now have to fill out forms and comat the invoices, that get lost, and then the vendor cuts them off for unpaid bills.  The office is filthy because the national cleaning contract dictates who the company can use even though the cost is higher and the small business that faithfully cleaned is out of a job.  The new copier that procurement ordered is great but the ink costs as much as a mini-cooper and the service contract stipulates that they will come and repair it in 72 hours vs the affordable work horse the branch manager bought from the local copier company who would send the owner out to fix your machine on a busy Friday night. Never mind that the collection department from India just made your long term customer so angry by repeatedly calling over a bill they paid two months ago that they cussed out the Branch Manager and pulled their business.  The company is obviously saving money by consolidating tasks and responsibilities, right?  Right?

Next, because the fictitious budget is not being met, Finance Steps it... they are hearing grumblings about the branch from accounting and the numbers just aren't looking too good this week.  So they take complete control of the finances that the Branch manager and his accounting person used to handle with zero problems.  There are 10 of these guys with titles generating reports and new KPI's and taking management retreats.

Hiring is the next casualty - a Branch Manager used to be able to hire and fire.  By knowing when a new employee was needed they quickly added staff based on the business they were managing and the new business sold. Today, the Branch Manager has to fill out three forms that climb to the CEO of the organization in another country if he needs another person.  The numbers from last month don't look that great so the request is denied.  Back at the Branch everybody is working hard, the new business does not implement well because there is not enough staff to do it, and then somebody complains that the Branch Manager was mean to them.  In walks the worst company killer of all, Human Resources.  Yes, they are just there to help.  No matter that the person who complained is an under performing passive aggressive nightmare that would have been fired 6 months ago under the old rules... no, now the Branch Manager is subjected to hours of documentation and questions regarding every word they have ever written and spoken.

The corporate executives determine that all of these problems are indeed created by the Branch Manager, who needs to be eliminated.  They can remotely manage the business through flow charts, reports, KPI's, and process mapping.  Yes indeed, that Branch Manager has to go...

All the while, their business is shrinking, their EBIT is suffering, customers are leaving, employees are miserable and corporations worldwide are doubling down on this failure.

Centralization of tasks, buying power, and bottom line authority takes away the spirit of the local manager or operator.  Assembly line processes eliminate responsibility, pride, and ownership.  What the economy of scale model offers to deliver is completely offset by the negatives that it brings.  The only thing it does is shrink business to fit in the inefficient model that no one can manage, no customers want to use, and nobody wants to work in.  After all, it was the Branch Manager's fault.